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Interest rate calculator.
Our helpful savings interest calculator lets you see how much interest you could earn when with your current interest rate.
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Choose from a range of savings accounts designed for your goals
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How do interest rates work?
Interest rates show the cost of borrowing or the return you earn on savings, usually expressed as an annual percentage.
When you save money in the UK, interest is often advertised as the AER (Annual Equivalent Rate). This figure shows what the interest rate would be if it were paid and compounded once each year. This makes it easier to compare different savings accounts on a like-for-like basis.
For example, if you took out a £10,000 loan at 6% for one year, you would pay £600 in interest, plus the original £10,000 you borrowed.
On the other hand, putting £10,000 into a savings account paying 6% AER, you would earn the equivalent of £600 in interest over the year (before tax, if applicable). If interest is paid more frequently, the compounding effect means you could earn slightly more than the headline rate suggests.
How does compound interest work?
Compound interest means you earn (or pay) interest not just on the original amount, but also on any interest that has already been added. This can make savings grow faster and borrowing more expensive over time.
Example: If you put £1,000 into a savings account paying 5% AER, you’d have £1,050 after the first year. In year two, interest is calculated on £1,050, giving you £1,102.50, and so on.
Factors That Influence Interest Rates
Bank of England Base Rate: The benchmark set by the Monetary Policy Committee, influencing borrowing and saving rates across the market.
Inflation: Higher inflation often leads to higher interest rates to control rising prices.
Economic Conditions: Growth, unemployment, and global events can all play a role.The Chip Instant Access Account gives you instant deposits and withdrawals, regularly updates the interest rate paid based on the market, and has FSCS protection up to £85,000.
Why Interest Rates Matter
Borrowing Costs: Even a 1% change in mortgage rates can mean hundreds of pounds difference in yearly repayments.
Savings Returns: Higher rates can boost the income from savings accounts, ISAs, and fixed bonds.
Meet our savings accounts.
*4+ withdrawals in a rolling 12-month period will reduce your rate to the Reduced Easy Access Rate.
T&Cs, eligibility criteria and minimum average balance applies.
